Condos: buying to rent

Walking around town, you can’t help but notice that condos are popping up like mushrooms. Some may see this as a catastrophe, especially with 20 condos currently available for every buyer, but others say that a cranefree city is a dead city.

Could there be a way of taking advantage of this abundance of condos, and is the cost worth it if you decide to buy to rent?

First, it’s worth noting that more and more tenants are leaving behind traditional dwellings to move into recently built rental condos.

LIKE AT A HOTEL. In addition to enjoying a certain level of luxury typical of newer buildings, tenants in these condos benefit from the same advantages as the owners: air conditioning, parking, rooftop terrace, gymnasium, pool, upkeep and much more. In short, it is a little like living at a hotel but without the constraints of ownership. Obviously, this luxurious freedom has a price, estimated to be 55% higher than that of traditional dwellings in Montréal and 30% higher in Québec City¹. But despite this, rental condos overall seem to have a vacancy rate lower than that of traditional dwellings.

And if so many condos are being built now in Montréal despite low sales percentages, it could be that developers know the market will be turning increasingly to rentals, a practice already common in Toronto.

Since about 2007, observers have noted that, rather than invest in five-plexes, more and more people are buying condos in clusters, sometimes in the same buildings, with the aim of renting them. In April 2012, an article in Le Devoir reported that, “officially, the Canada Mortgage and Housing Corporation estimates that this figure is 9.3%, reaching 20% downtown (Montréal), compared with 6.3% in Québec City.”

That said, the option of buying a condo with a view to renting it may prove worthwhile, especially if it is a long-term investment for housing your children or even for living there yourself when you retire.

1. Source: Le Devoir, «Condominiums de location – Acheter pour louer», April 14, 2012.

Did you know... The lion’s share

If you have a keen sense of observation or a particular love of animals, you may have noticed the statues of lions, like gatekeepers, standing guard on both sides of the main entrance of some residences. This is not just some chance decoration but rather a symbol serving to demonstrate a certain social success.

Among Italians of modest origins, this custom is intended to signify that the people living there have finished paying off the monthly instalments on their houses. And while the same applies to people from several other backgrounds, it is not the case among the Chinese.

For the latter, the tradition goes back to Imperial China, to an era when lions were believed to have protective powers. It is therefore with the idea of protection from the outside that, even today, this type of statue stands in front of many Chinese hotels, supermarkets or restaurants. It should be noted that lions are generally represented as couples, the male with a paw resting on a ball (representing the world) and the female accompanied by one or more lion cubs symbolizing fertility and education.

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